Airbnb hits tourist tax problem - could it happen here?

The rise and rise of Airbnb - the global online short-lets system that could be used by landlords to short-circuit letting agents - has not gone unnoticed by tax authorities. 

Rental properties in the most popular city on Airbnb’s home sharing platform - Paris - will soon have a tourist tax applied to them. 

Collected directly from the users of properties the tax will come into effect from October 1. Over the course of the following year it will be applied to other French cities where the platform operates.

“The move is a result of changes to made to the ‘Loi Alur’ last year, which saw a raft of measures brought in to transform the French housing market” according to Camille Letuve of Athena Advisors, a sales network for French holiday and investment properties. 

From October 1 tourists using Airbnb will now pay a fee of €0.83 per person per night, with Airbnb properties now being classified under the rental category of furnished lets or ‘meublés touristiques non classés’.

The move is the latest in a number of recent similar tourist tax collection agreements. A similar agreement in Amsterdam came into affect in February this year, after a series of others in the US from Washington to San Francisco.

In the face of rising hotel costs Airbnb has grown very quickly in Paris over the last few years. “Three years ago there were only a few thousand listings and now there are over 50,000” says Letuve. 

“It’s no surprise really as the rent caps on long-term rentals mean that owners find it easier to generate rental returns through short-lets, even if managing them may be more intense.”

Figures from Airbnb back in June 2013 show that Parisian properties on Airbnb generated €185 million towards the economy. Paris-based hosts accommodated 223,000 Airbnb users between May 2012 and April 2013 with 83 per cent of hosts renting out the homes they live in on an occasional basis. 

On average Airbnb guests stay 5.2 nights and spend €865 over the course of their trip, compared to hotel guests who stay an average of 2.3 nights and spend €439. 

In the UK the Rent A Room allowance permits owners who take in lodgers need not pay tax on their first £4,250 of income - last month’s Budget included an announcement that this will increase to £7,500 from next year.

But professional and semi-professional landlords and holiday let owners, who may well get in excess of £7,500 income by letting through Airbnb, would be eligible for tax on their letting income.